Electronics Industry Returns to Business as Usual
Area Firms Report Acquiring Key Products, Personnel
BY GIG PATTA
Electronics companies in San Diego breathed a slight sigh of relief after a turbulent year of layoffs, skyrocketing electricity prices and softening of the economy last year.
This year, those companies look forward to returning to business as usual.
According to the American Electronics Association, a high-tech trade association, San Diego is the nation’s third-largest cyber-city in consumer electronics manufacturing employment. The city has more than 2,200 high-tech establishments paying an average wage of $53,000, or 69 percent more than the average private sector wage.
The state Employment Development Department reported the county employs more than 22,900 workers in electronic equipment manufacturing as of March, a decrease of 9.8 percent from a year ago. It also includes electronics companies in household audio equipment, communications equipment and electronic components.
For the industrial machinery industry, the EDD reported more than 16,800 workers as of March, a decrease of 3.4 percent from last year’s figures.
On the San Diego Business Journal’s List of Electronics Companies, the 25 companies on The List reported more than 19,000 employees. Twelve of the companies reported decreases in employment from the previous year.
“The economy is best described as being a bit soft,” said Bob Murphy, marketing manager of US/MEX Manufacturing, Inc. in National City, No. 21 on The List.
Murphy said the first quarter of this year had a lot of quoting activity, which is seen as a positive sign.
US/MEX is an outsourced manufacturer with facilities in National City and Mexico. The company has more than 150 employees working in Tijuana and Ensenada. It manufactures a broad range of products from electronic components, consumer products, power supplies to computer/office equipment and instrumentation equipment.
The company handles “build-to-print” manufacturing, in which a potential customer designs and develops the product and comes to US/MEX to manufacture the product from the components to the packaging. US/MEX’s largest customer is Tyco Electronics.
Murphy said companies are looking for ways to reduce costs in their operations.
“United States industries have the tendency to look for the best possible prices,” said Murphy. “Sometimes the problem is that companies go with manufacturing in China rather than having operations in the United States or Mexico.”
Murphy said having operations overseas could be costly, because companies can lose control of production and increased costs due to transportation of goods from overseas.
“It’s recommended to have a company’s manufacturing process here in the Americas,” said Murphy. “The company can save on time, labor and material (costs).”
In the past year, some business acquisitions by electronics companies resulted in new or expanding businesses.
In November, Vista-based Directed Electronics acquired ADS Technologies, the makers of a/d/s, Precision Power and Orion audio brands to expand its audio businesses.
“The acquisition of these well-known brands, along with many of the talented people who have played key roles in their past success, are going to be key components in our overall strategy to become a major player in the audio business in the years ahead,” said CEO Jim Minarik in a press release.
Kyocera Wireless, ranked No. 3 on The List, was formed in February 2000 after Kyocera Corp.’s acquisition of Qualcomm’s wireless handset manufacturing division. The new company employs 2,800 workers with its headquarters in University City.
Kyocera Wireless’ products are based on Qualcomm’s Code Division Multiple Access, or CDMA, technology. It is also a subsidiary of Kyocera International, Inc. of San Diego.
Other acquisitions in the past year include Poway’s Cohu, Inc., No. 6 on The List, acquiring the assets of the Automated Systems business, a unit of Columbus, Ohio-based Schulumberger Technologies, Inc. in July for $14.2 million in cash; and ViaSat of Carlsbad, No. 10 on The List, acquired Comsat Labs in Clarksburg, Md., from Lockheed Martin in July and Phoenix-based US Monolithics in December.